Worcester's property valuation drops by $400M

WORCESTER 
The total assessed value of all taxable property in the city has lost most of its gains from the previous year, having dropped by nearly $400 million.

City Assessor William J. Ford said his office has determined total valuation for this fiscal year is $10.9 billion. That is based on the assessor's opinion of value for all individual taxable properties as of Jan. 1, 2012.

In comparison, the total valuation for the previous fiscal year was $11.3 billion.

With the drop in Worcester's total valuation, there is a corresponding increase to its combined single tax rate; it has gone up by $1.70, to $22.03, according to Mr. Ford.

Since 1984, the City Council has set separate tax rates for residential and commercial-industrial properties, using tax classification to shift more of the tax burden from residential to business property owners. The combined single rate is what the city's tax rate would be without classification.

The council is to hold its annual tax classification hearing on Dec. 4 and set the tax rates for this fiscal year.

Under tax classification, the City Council this year can set the residential tax rate as low as $17.72 per $1,000 in valuation; that would translate into a commercial-industrial tax rate of $33.05, according to Mr. Ford.

The tax rates for last fiscal year were $16.98 for residential and $29.07 for commercial-industrial properties.

It is the fourth time in the last five years that the city's total valuation has either dropped or held steady.

The only time it increased during that time was last fiscal year when a comprehensive revaluation of all taxable properties was undertaken.

That year, Worcester's total assessed valuation increased by roughly $420 million, but with this year's drop in property values the total valuation is now only about $22 million more than what it was two years ago.

The high water mark for the city's total valuation came in 2008, when it reached $12.7 billion; the city is now $1.8 billion below that figure.

Residential property accounts for 72 percent of the tax base, while business properties make up the other 28 percent, according to the assessor.

The decrease in Worcester's total valuation was fueled by decreases in all classes of real estate, including commercial and industrial properties, which had significant increases last year.

According to the assessor, single-family home valuations dropped from an average assessment of $198,061 a year ago to $187,961.

The average value for condominiums, meanwhile, dropped from $118,884 to $112,839, and values for two-family homes fell from $251,251 to $241,779.

Three-family homes, which have had a significant drop-off in their assessed valuations since 2008, had the smallest decrease at less than 1 percent. The average assessment for a three-decker is now at $184,867 compared to $186,579 a year ago.

A year after the assessed values for commercial and industrial properties jumped dramatically — 25 percent on average for commercial properties and 28 percent for industrial properties — they, too, have seen their assessments drop this year, though not at the same rate as residential properties.

According to the assessor, the average valuation for commercial properties has dropped from $823,525 to $813,526.

The average assessment for industrial properties has fallen from $947,499 to $920,061.

More than $153.5 million worth of new property made it on to the tax rolls the past year, with the biggest increases coming in personal property ($70.7 million) and commercial property ($60.5 million).

Meanwhile, there was $37.3 million in so-called “new growth” in residential property.